It’s important to have all of the facts before believing a sham of a plan that will allow Gov. Corbett to do to pensions what he’s already done to public education: cut public funding so more taxpayer dollars can be diverted to grant massive corporate tax breaks.
Claiming “at least he has a plan” (“Fighting chance,” April 16 editorial) doesn’t cut it when the governor’s plan will destabilize two pension systems that have provided a modest, middle-class benefit for teachers, bus drivers, public safety personnel, librarians, nurses and other middle-class wage earners for nearly 100 years.
Gov. Corbett’s plan for the Public School Employees Retirement System and State Employees Retirement System will undermine the retirement security of hundreds of thousands of Pennsylvania residents, add $5 billion in new pension debt to be assumed by taxpayers between now and 2019, and undercut bipartisan pension reform legislation, which — if given a chance to do what it was designed to do — will gradually restore pension funding to sustainable levels, without jeopardizing the welfare of our senior citizens.
“Fighting chance” ignored or distorted several key facts:
• Unlike private-sector pension plans, in which employees usually make no contribution, public employees pay about 7 percent of their salaries into their pensions every paycheck, every year, over decades-long careers.
• From 2001 to 2009, teachers, public safety officers, nurses and other public servants paid more than twice as much into their pensions as their employers, which had been granted an extended contribution “holiday,” during which they contributed little or nothing. The governor’s plan continues deferring employer pension payments, which will only make the pension debt worse.
• If employers had contributed as much as public employers’ national average toward pensions just since 2011, SERS and PSERS would have $20 billion more in contributions and investments now, which represents half of the funds’ combined debt, a new Keystone Research Center study shows.
• In 2010, legislators passed Act 120, pension reform that reduced employer pension costs for new employees to 2 percent of wages, raised the retirement age and increased the vesting period, eliminated lump-sum withdrawals for employee contributions and created a shared-risk feature that increases employee contributions should investment returns under-perform.
Pension payments aren’t the reason school districts across Pennsylvania are struggling to provide vital programs and services, such as preschool and full-day kindergarten, art and music, libraries, nurses and counselors and tutoring, enrichment and sports, to our children and grandchildren.
They’re struggling because Gov. Corbett cut nearly $1 billion in public education funding in each of his first two years in office, and he plans to extend the bulk of those billion-dollar cuts into the coming school year.
Meanwhile, the governor continues to give costly new business tax cuts to his corporate campaign contributors instead of closing reasonable tax loopholes that siphon $800 million a year from our schools, colleges and universities and other public services, according to the Pennsylvania Budget and Policy Center.
Give Act 120, the bipartisan pension reform law, a chance to what it was designed to do: stabilize school and state employee pension funds and provide retirement security for middle-class Pennsylvanians.